Let’s Make the Banks Write Down Underwater Mortgages

The federal government and state attorneys general, including Washington State’s Rob McKenna, are currently negotiating a settlement with the big banks over foreclosure abuses, with a deal expected within the next few weeks.

Unless the public stays vigilant, this settlement could turn into a slap on the hand for Wall Street, with a slap in the face to homeowners. Recently reported settlement proposals would effectively absolve major financial institutions of meaningful civil and criminal liability in one of the largest alleged fraud schemes of the Wall Street Recession.

Because the deal lets the big banks off easy, attorneys general from New York, Delaware, Massachusetts and Nevada are no longer participating in discussions (with California mostly out as well). The last thing Attorney General McKenna should be doing right now is absolving the big banks of responsibility for their role in the foreclosure crisis.

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